Interesting Figures: Offshore Drilling

From the Union Tribune:


I would like to comment on a couple interesting points in this article.

“The debate will be dominated by . . . the 'drill at any cost' crowd and the 'don't drill at any cost' crowd, and their ideological priors and political power will pre-empt any good policy discussion,” said Thomas Firey, who monitors energy issues for the Cato Institute, a libertarian research group in Washington, D.C.

That sounds about right. I am generally skeptical that opening up more drilling will be beneficial, but it still deserves a reasonable debate.

The impassioned debate masks a little-known reality: About two-thirds of the recoverable oil reserves on the Outer Continental Shelf in the lower 48 states already are accessible for development.

I did not realize this.

Agency director Randall Luthi figures the reserves are much greater because most of the research was conducted before 1981 using less-sophisticated equipment.

It makes sense to update offshore oil estimates and gauge what it would take to tap reserves, said Firey of the Cato Institute.

I don't disagree that it makes sense to understand what resources are available so you can make informed decisions. What types of trade-offs are we really making? This same logic enters into my argument that we need more funding for coastal and ocean research (both natural and social).

The shifting sentiment has fueled campaigns, including one by former House Speaker Newt Gingrich, a Republican who heads the political advocacy group American Solutions for Winning the Future.

“Drill here. Drill now. Pay less,” is one of the group's slogans.

“The pro-drilling forces are clearly winning the sound-bite war because the concept sounds good,” said Warner Chabot, a vice president at the Ocean Conservancy in San Francisco. “Unfortunately, it doesn't work and it's not true.”

The Drill now, Pay less argument is just false. It is well documented that this will not lead to lower prices. This type of political rhetoric, much like the gas tax holiday, sounds good, but is just nonsense. Why do we let politicians get away with this? A more realistic argument would be drill now, increase government revenues, create jobs. Those benefits might not outweigh other costs, but it is a more honest argument. Last,

“If we fight like hell to keep oil off our coast, what happens in Africa or South America when the same companies develop oil in those places?” asked Michael McGinnis, acting director of the Ocean and Coastal Policy Center at the University of California Santa Barbara.

“We must not just think about the production of oil off our coast, but our consumption of oil,” he said. “One thing I haven't seen in the political debates is coming to grasp with real tough, tragic choices that we need to make.”

This is a good point. We need to begin to shift our thinking so that we conserve our resources more effectively.